Thursday, July 18, 2013

International due diligence is a common and leading practice for companies that operate in the international world.  Globalization is now the reality, and global business requires global due diligence to avoid fraud and scams and costly business mistakes.  In fact, it is a practice supported by the U.S. Foreign Corrupt Practices, Act (FCPA), U.K. Bribery Act, and multinational agreements urge companies to know their potential international partners before engaging in business.

Why do companies need the service?  The grass is always greener on the other side, as the saying goes.  Once you enter into the other's world, however, things are not always as they seem.  To screen a company prior to a merger or prior to making payment is a wise move. According to international investigators around the globe, due diligence can prevent companies from falling into major and costly traps involving foreign partners.  John Wallace at Wymoo International says the damage done is far too common.  "If you're in the U.S. or Canada, and you're thinking of doing business with a new company or person in Malaysia, France, Ghana, Hong Kong, Russia or any place on the map, you need a local and trained investigator who speaks the same language to verify facilities, reputation, business filings, check references, and screen for fraud."

Developing countries such as India and China and the Philippines can offer great returns on investment, but the risk is high and should not be ignored.  Too many managers keep their fingers crossed and hope the deal will go through, rather than having the insurance they need.

The most common practice these days from fake foreign companies is to approach corporations or medium to small businesses online.  The Internet has benefited all the bad guys with the gift of anonymity and a fake company can look quite professional and reliable online, but there's almost no way to know for sure if you haven't been there or verified all the known information.

International due diligence performed prior any important move is a first and responsible step.  Professional investigation companies with investigators on the ground where you need them can provide clear evidence, so you can make an informed business decision based on solid evidence.  In a world with rising fraud and scam cases, it pays to do your homework and be safe.

A. Hathaway 
© 2013 A. Hathaway

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